A Brazen Bid for Fannie, Freddie

Common and preferred shares of the mortgage giants have soared as hedge and mutual funds angle to be made whole. The investors' efforts shouldn't succeed.

So relentless has been the rise in U.S. stock prices this year that bull Ed Yardeni of Yardeni Research worries that the market may be in the "early innings" of a melt-up.

This could be troublesome if the market's rise keeps up its recent pace, he avers. The price/earnings ratio on forward earnings of the S&P 500 has already risen from 10 during the summer of 2011 to about 15. That P/E level isn't historically problematic. But should stocks push up to the frothy level of 17 to 19 early next year, that could...